Problems of the hierarchic company

Slide 1: Problems of the hierarchic company

Slide 2: Characteristic # 1 Stable and low complex environment

Slide 3: Low complex Complex environment environment Stable Machine environ- Bureaucracy ment Dynamic environ- ment

Slide 4: Problem The environment of many companies is often both complex and dynamic.

Slide 5: Characteristic # 2 Hierarchical structure to keep control over operational work

Slide 6: Power for decision making is centralized at the top

Slide 7: The individual employee / manager communicates vertically.

Slide 8: Problem # 1 Much time is wasted on traditional meetings. Decision making is slow.

Slide 9: Problem # 2 The potential of interactive and collaborative technologies such as blogs is not sufficiently taken advantage of to commu- nicate across functions and hierarchies.

Slide 10: Characteristic # 3 Command and control management to establish regularity and predictability in operational work

Slide 11: 1-way flow of commands from top to bottom

Slide 12: People are told what to do and how to do it

Slide 13: Problem # 1 More and more people are well educated and can manage themselves.

Slide 14: Problem # 2 Command-and-control management makes many people act reactively, i.e. more or less like machines - and stop thinking / acting proactively. People take initiatives only in their spare time, i.e. after having finished work.

Slide 15: Characteristic # 4 Standardization to effectively and at low costs produce, pack, and transport products

Slide 16: Problem Customers want more and more differentiated products, variability, individualization.

Slide 17: Characteristic # 5 Specialized work to reduce complexity and increase effectiveness

Slide 18: Analysts standardize work

Slide 19: Each worker does specialized operational assignments

Slide 20: Examples: Developers develop. Distributors distribute. Sellers sell.

Slide 21: Employees and managers become specialists by doing the identical standardized assignments day in and day out – usually at a fixed number of hours each day and at a certain place.

Slide 23: Problem # 1 People stop thinking across borders - for example across functions, industries, geograhies. Thereby, the company only slowly renews itself.

Slide 24: ”The old organizations are breaking down, because if everybody is doing a well-defined task and job requirements change, people do not know what to do anymore – nor do their bosses. And today’s fast-moving, competitive markets will not let you hide this kind of ignorance inside your organization.” Source: Abell, Derek F.: Managing With Dual Strategies, p. 129.

Slide 25: Problem # 2 Internet tools, that give people the opportunity to work inde- pendent of time and place, are not sufficiently taken advantage of.

Slide 26: Characteristic # 6 Plans, budgets, templates, rules, guidelines etc. to uphold standardization and specialization

Slide 27: Structures and processes are VERY important.

Slide 28: Structure Process Task

Slide 29: Problem # 1 In an uncertain world, where many things constantly change, It is better to continuously try things out than to constantly refine plans.

Slide 30: Problem # 1 Work becomes routine. People lose the competence to think and act creatively, try things out spontaneously etc.

Slide 31: Problem # 2 Lack of freedom prevents people from following their interests, i.e. doing things which may bring significant value.

Slide 32: Characteristic # 7 Political decision making

Slide 33: Problem # 1 Owners/managers keep putting money into old, slow growth strategies that were once successful. Resources are slowly reallocated from old to new strategies.

Slide 34: Market Question marks Stars growth Try out ideas with Develop great concept growth potential. further. Poor dogs Cash cows Fix, sell, or close Look out for new down. “question marks” to invest in. Market share

Slide 35: Problem # 2 Many managers hire and keep the wrong people, i.e. people who want to maintain status quo – not people who want to change/renew.

Slide 36: Characteristic # 8 Contractual relationship between manager and employee

Slide 37: Problem # 1 Many people do only what is written in their individual contract. Consequently, collaboration suffers.

Slide 38: Problem # 2 In the business environment, we increasingly live in, there is more focus on relations, for example customer relations and relations between business partners.

Slide 39: Characteristic # 9 Education is a cost that must be minimized

Slide 40: Problem Many and frequent changes make education an integrated and necessary part of work.

Slide 41: Characteristic # 10 Jobs are career jobs

Slide 42: Problem # 1 People with high competencies in operational areas are promoted to become managers. In other words: People stop doing what they are really good at.

Slide 43: Problem # 2 The company becomes a number of ”department siloes”. There is limited communication across the company.

Slide 44: Problem # 3 More and more work is temporary / freelance / part time / nonstandard / non-career / more flexible.

Slide 45: Problem # 4 More and more people solve assignments for more companies / more people - not only for one company.